The author is a Forbes contributor. The opinions expressed are those of the writer.

Loading ...

Loading ...

This story appears in the {{article.article.magazine.pretty_date}} issue of {{article.article.magazine.pubName}}. Subscribe

An excellent piece of analysis from Ben Evans here. Excellent does not, by the way, necessarily mean correct. Rather, asking interesting questions and working through the implications of possible answers to them.

Evans starts out by pointing to what might have been Google's original base intention with Android. Just to make sure that Google wasn't shut out of the mobile market. By that simple standard obviously it has been successful. However, we then go on to the problem of forking and whether Android will continue to add to Google's presence in mobile. And there's a possibility at least that it won't.

An Android device, properly signed into a Google account and running all the Google Apps, generates an endless stream of little bits of 'signalling' information, way beyond what Google gets from a desktop search user even if they're using Chrome. It knows where you live and work, how you commute - and which phone numbers on web ads you dial. Unlike a web browser, you are probably always signed in to Google, so all of your interactions with Search, Maps and anything else can be linked together. (This, of course, is also the main purpose of Google Plus.)

Yes, absolutely true and very useful indeed to Google when it comes to showing ads. And do remember that Google's business model depends almost entirely on showing ads. That's where something like 95% of the revenue comes from and what Google really is as a business. An advertising company. Knowing who you are, where you are, your past behaviour, links and visits, increases the value to Google of any ads it might be able to show you.

But, but:

Obviously, Google's access to this data on non-Android platforms is pretty partial, but the problem also applies to significant parts of the Android base. In China the problem is near-absolute. Google services are mostly blocked anyway, almost all Android phones ship with few or no Google services installed (i.e. they are based on the open source AOSP version of Android) and hence Google gets close to zero practical benefit from the explosive growth of Android there. There is a similar issue in other emerging markets - a significant portion of those $45 handsets skimp on Google apps just as they skimp on IMEI numbers.

For some large and increasing share of the Android market Google's not only not getting traffic to its own sites. It's not even getting that user data that makes its ads more valuable. Which leads us to the final question.

If Google's not making all that much money out of Android then for how long is it going to continue spending a fortune to develop Android?

There's no, as yet, correct answer to this question. But it's an interesting one to ask all the same.